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UK property market set for busiest year since 2007

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Hoses in south London. Photo: Toby Melville/Reuters
Hoses in south London. Photo: Toby Melville/Reuters

More home sales are expected in 2021 than when the market last peaked in 2007, before the financial crisis, new data revealed.

According to estate agents Zoopla “UK property market momentum continues at pace” with sales transactions expected to reach 1.5 million in the year to December, up 45% year-on year.

It said in a report that while the total number of transactions in 2020 was curtailed by market closures during the initial lockdown, average annual transactions over the previous decade have rarely gone beyond 1 million to 1.2 million.

Sales of 1.5 million would mark 2021 as the “busiest sales market since the peak that preceded the Global Financial Crash, and one of the 10 busiest years since 1959.”

The value of homes sold in 2021 is expected to reach £461bn ($654bn) – up 46% year-on-year, and 68% compared with 2019.

While acute market activity is driving the total value of sales, more expensive homes are also changing hands as people "search for more space".

Caroline Pattinson, managing director at estate agent Pattinson said: “Properties on the whole are selling much faster than before the pandemic, and it’s common in this current market to find that a home has gone under offer in a matter of days."

Annual house price growth has almost doubled over the past year. In April, house price growth reached 4.1%, up from 2.3% in April of 2020.

The total number of homes available to buy is down 20.8% in the year to mid-May, compared with the average last year, and activity is likely to be hampered by supply constraints.

Read more: Seller shortage sends UK house prices soaring

“The main challenge we are now facing is a lack of stock, in fact we are roughly around 36% down year on year – a challenge that the industry is facing as a whole and will lead to additional competition and increased pricing,” said Kate Eales, head of regional residential agency at Strutt and Parker.

“But with the continued success of the vaccine roll out and people feeling more comfortable, we do expect more vendors, particularly older generations to now come to the market. As such, the shortfall between stock and demand may diminish across the rest of 2021.”

Grainne Gilmore, head of research at Zoopla said: “The easing of lockdowns will continue to cause a natural fall in demand as people are able to see family and enjoy amenities that have been shut for more than a year, but new buyer demand will still emerge throughout the second half as office-based workplaces confirm if they will be pursuing more flexible working practices.”

Watch: What do stamp duty cuts mean for buyers and house prices?

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